(Bloomberg) -- Saab AB is targeting a flurry of export deals for the latest version of its Gripen warplane following the first flight of a fighter destined for Brazil as part of a landmark contract there.
The Swedish defense contractor is pitting the Gripen against a formidable lineup of rival jets from Boeing Co., Lockheed Martin Corp., Eurofighter and France’s Dassault Aviation SA, but sees strong sales potential from a batch of current tenders, aeronautics chief Jonas Hjelm said in an interview.
The selection last year of the Boeing/Saab T-X to fulfill U.S. fast-jet training requirements for years to come has also provided a boost to the Scandinavian company’s global standing, he said.
Among the brightest order prospects are a requirement for 64 fighters from Sweden’s neighbor Finland, a Canadian tender for 88 jets where Eurofighter and Dassault have already pulled out, Croatia’s reopened pitch to replace outdated Mikoyan MiG-21s, and a contest in Colombia where Hjelm said the Brazil deal may provide a template for a winning bid. He reiterated a target of 400 to 500 Gripen orders over 15 years, or more than 10% of the available fighter market.
“To win in Brazil was huge,” the executive said by telephone. “It really puts us on the world map. The T-X is also a huge thing. The Brazilian air force and the U.S. air force, they don’t choose a product that’s not a good product. It’s a recognition, and I think we’ll benefit overall.”
The 11 billion-euro ($12.2 billion) Finnish requirement is “top of the list” among outstanding fighter contests, Hjelm said, with the new Gripen E due to be demonstrated in flight trials at the start of next year and a preferred bidder selected by early 2021.
Manufacturers are due to submit bids for the Canadian tender, now a three-horse race with Boeing and Lockheed Martin, in the first quarter of 2020, while the Croatia requirement is in its early stages after being revived when the Balkan state was unable to source used Lockheed Martin F-16s from Israel.
Hjelm said Saab is optimistic about the Colombian requirement, with the air force examining proposals and likely to respond later this year or early next. The South American country’s aerospace industry is advanced enough for Saab to be able to offer work-share and technology transfer to help win the order, he said, paralleling enticements that helped secure the 36-jet Brazilian deal.
The fourth Gripen E built and the first production plane took to the air on Aug. 26 and was presented to Brazil on Tuesday at a ceremony in Sweden attended by the South American country’s Defense Minister Fernando Azevedo e Silva and air force chief Lieutenant Brigadier Antonio Carlos Moretti Bermudez, as well as outgoing Saab Chief Executive Officer Hakan Buskhe.
While the Mach 2 jet will remain in Sweden to continue flight tests, with the first-delivery milestone effectively achieved, Saab will also seek to explore prospects for a follow-on deal.
Other possible Gripen buyers include Austria, the Philippines and India, where a mammoth contest for more than 100 planes is imminent after the Dassault Rafale won a truncated initial order, Hjelm said. He said there’s no news on a follow-on sale of the E-variant to Sweden, which has 60 planes on order.
The executive said he understands comments from incoming CEO Micael Johansson stressing that it’s time for Saab to begin boosting earnings and cash flow by delivering on its previous heavy investment in development.
“It’s not time for me to relax,” he said. “It is time to deliver. Especially from my side. I have a large portion of the backlog.”
(Updates with handover ceremony in ninth paragraph, further comments from Hjelm starting in 12th.)
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